An Alternative to Economic Growth

An Alternative to Economic Growth


Common sense tells us that we cannot sustain economic growth due to the physical limitation of resources on our planet, as I discussed in “The Paradox of Our Time“. This raises the question that what alternative do we have to economic growth, and how can we achieve it? To explore this, I would like to first discuss a concept that is used in technology adoption, called the S-curve.

S-curveWhen a tech company introduces a new product to the market, the widget would initially have a relatively slow acceptance rate, followed by an exponential growth, and finally its population levels off to a constant value as demand reaches saturation (solid red S-curve). In order for the company to maintain growth, it needs to push new product to the market as demand approaches saturation (dashed red S-curve). These new products are often driven to the market by creating fictitious need using various forces such as advertisement as well as planned obsolescence. Such continuous push enables tech companies to sustain growth, and the cumulative effect of such businesses is a major contribution to the growth of an economy. Considering the effects that producing new goods have on the environment, as well as the time and effort that we need to invest with our lives for developing and manufacturing them, makes one wonder if there are better alternatives for utilizing technology as well as managing an economy…

Looking more closely at the S-curve, it reveals an interesting dynamics: while populations growth is part of the adoption phase of a new product, demand reaches a plateau as market saturates. In other words, population growth is inherently a means to reaching a steady state, as oppose to being the dominant characteristic of a population. Applying such dynamics to an economic system, it suggests that an alternative to an economy that is based on growth is one that is based on a stable state, with growth being the means for reaching a new steady state. Such economic system would result in a linear growth, as oppose to an exponential one, which would be much less demanding on the environment as well as on our lives. However, as good as this might sound, creating such structural changes in an economy is a different beast! Following is what I believe to be the core for such transition:

An economy is a dynamical system that changes constantly and there are many factors affecting it. Among those, cultural values and norms play an important role as they shape our decisions and behaviours. In this context, I believe structural changes in our current economic system require transition from a consumer-based culture that values ever-increasing acquisition of products and services, to one that values community development and personal growth at its core, i.e., a Community Culture. Such culture capitalizes on unbounded growth opportunities in personal and social capabilities such as self-awareness, emotional development, artistic creations, and empathy. Obviously, growth in personal and community dimensions of our lives would have a significant effect on our well-being, considering that the state of our technology has far passed the level required to satisfy our basic needs. Let me illustrate this with an example:

Currently, the number of active mobile phones in the world is more than the number of people on the planet (many have more than one active phone). We also keep manufacturing some 2 billion additional phones every year, and expect this number to grow even further. The frenzy is primarily driven by our consumer culture that perceives acquisition of latest technological products as a value (average replacement time is less than 18 months). Clearly, we can significantly reduce mobile phone manufacturing, if there is a shift in our gadget purchasing behaviour. The reality is that during the average 18 months that we change our phones, only minor changes happen in mobile phones, however, it is primarily our value system that encourages us to obtain the latest possible gadget. A culture that highly values deep connection with self, community, and nature, could not only result in more joyful, empowering, and fulfilling experiences, but could also cause significant reduction in our consumption behaviour.

Looking forward to the days that we treat ourselves and our home planet in a better way.

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